The national accounts of each country provide our

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Unformatted text preview: t, but still well above
the economy’s 3.4 percent growth rate in the two decades before 1978. India’s
growth also accelerated by a full 2 percentage points between the two subperiods:
1978 –93 and 1993–2004. The national accounts of each country provide our basic
source for data on output for the total economy and the three major sectors:
agriculture, manufacturing, and services. India’s national accounts data are used
without modiﬁcation. However, as discussed below, we did make adjustments to the
Chinese data by using an alternative price deﬂator for the manufacturing sector to
address concerns that ofﬁcial series may overstate the rate of real growth.
As shown in the second column of Table 1, China and India experienced
nearly identical rates of employment growth over the full period. At the level of the
th
total economy, over a period of several decades, employment growth is largely
determined by growth in the population of labor force age. The marked slowing of
employment growth in China during the 1993–2004 period is also evident in
estimates of the population of labor force age and reﬂects the sharp decline in the Required Reading Pindyck and Rubinfeld (7 edition), Chapter 6, pp. 195-207. 6...
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